The Australian Energy Market Operator (AEMO) has released its Two Year Outlook (PSA) report into the expected impacts on medium term power system security and reliability.

 

The report, which complements the recently released Electricity Statement of Opportunities, examines scenarios which assess the key aspects of power system’s capability and takes into account the Commonwealth Government’s Clean Energy Future Plan announced on 10 July 2011.

 

The PSA is primarily concerned with assessing the electricity supply outlook over the next two years by using two key scenarios, the Expected Scenario and the Sensitivity Scenario:

 

  • The Expected Scenario represents the most likely power system outcomes, and is based on the most probable forecasts and anticipated generation availability. The connection of wind farms recently classified as advanced proposals2 is also considered when they potentially impact power system operations.3
  • The Sensitivity Scenario examines the outcomes from a particular event, which will be updated each year in response to emerging trends and options. The 2011 PSA examines the potential impact of the withdrawal of 1,000 MW of older generation distributed across the National Electricity Market (NEM).

 

The report also addresses the sector’s concerns with the Australian Government’s Clean Energy Future Plan. The report finds the following policy intiatives to be of interest to the sector:

 

  • The progressive introduction of a CO2-e price of $23, $24.15, and $25.40 per tonne each year for the first three years (for business emitting more than 25 kilotonnes (KT) of CO2-e per annum).
  • Assistance of $5.5 billion for a pool of generators5 over the first five years ($1 billion in the 2011–12 financial year, followed by 41.7 million free carbon permits each financial year from 2013–14 to 2016–17).
  • The contract for closure of up to 2,000 MW of coal-fired generation with emissions intensity above 1.2 tonnes of CO2-e per megawatt hour (t CO2-e/MWh) by 2020. AEMO understands that eligible power stations include Playford, Hazelwood, Yallourn, and Morwell, and the Government is expected to seek expressions of interest in September 2011, with the aim to complete the process before the end of 2011–12.

 

The results from the 2011 two-year assessment (involving forecast conditions and supply capabilities as advised by the JPBs and market participants) established the following key points:

 

  • The reserve capacity and energy adequacy assessment found that the power system is expected to have sufficient supply capacity to meet the Reliability Panel’s reserve requirements, and as at the time of publication, AEMO does not intend to invoke the Reliability and Emergency Reserve Trader (RERT) tender process.
  • The operational capacity assessment indicates that significant new operational problems are unlikely. An area of possible concern involves the adequacy of frequency control during periods of high wind generation, and AEMO is currently working to address this issue.

 

The full report can be found here